Big Company Acquired the Following Assets and Liabilities of Little

question 35

Multiple Choice

Big Company acquired the following assets and liabilities of Little Company (fair values listed below) for $470,000 cash.

Assuming these items are all recorded at their acquisition date fair values,what additional item needs to be recorded and how will it be accounted for in the future?

• A) $30,000 Goodwill, capitalized and tested for impairment
• B) $30,000 Bargain purchase, recognized in current earnings
• C) $30,000 Bargain purchase, capitalized and recognized over time
• D) $30,000 Goodwill, capitalized and amortized over time

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Definitions:

Permissive Environment

An environment or setting that allows or encourages freedom of behavior without imposing strict rules or limitations.

Authoritative Parents

Parenting style characterized by high responsiveness and high demand; parents are supportive yet set clear and firm limits.

Battered

Often used to describe individuals who have experienced repeated physical or emotional abuse, particularly in the context of domestic violence.

Avoidant Attachment

Avoidant attachment is a type of insecure attachment style characterized by a desire to maintain independence and emotional distance from others, often as a defensive measure against rejection or vulnerability.